Dangote acquires 25% stake in Kenyan oil pipeline, targeting southern African markets

Toyyibat Qasim

Africa’s richest industrialist Aliko Dangote has unveiled an ambitious plan to create a continent-wide oil distribution network, revealing that his conglomerate has acquired a 25% stake in Kenya’s petroleum products pipeline network as part of efforts to expand its presence in African energy markets.

Dangote also revealed plans for oil storage terminals, tank depots and distribution corridors linking Djibouti, Ethiopia, Cameroon and Namibia, with further expansion planned in Botswana, South Africa, Zimbabwe and Zambia.

The chairman and CEO of Dangote Industries Limited revealed the plans during an interview with Financial Times Africa editor David Pilling at the FT Africa Summit in London.

The proposed network is expected to enhance the movement of refined petroleum products from major refining centers to markets facing supply constraints and fragmented distribution infrastructure.

Dangote said the Group is pursuing expansion aggressively, describing energy distribution infrastructure as key to improving Africa’s energy security and accelerating industrial development.

“Let me say that yesterday, with the support of the President of Kenya, we purchased 25% of the pipeline network for the distribution of petroleum products,” he said.

The acquisition represents a significant step in the conglomerate’s strategy to expand beyond refining into the transportation, storage and distribution of petroleum products across the continent.

Dangote explained that the Group is developing a major distribution corridor connecting Djibouti with Addis Ababa, Ethiopia, supported by storage terminals and tank depots to facilitate the efficient movement of refined products.

He added that another strategic project in Cameroon is nearing completion, while Namibia has emerged as a potential gateway for expansion into Southern African markets.

According to him, Namibia’s geographical location makes it attractive for the distribution of petroleum products from the Dangote oil refinery in Lagos.

“It takes about four days of steam from our refinery to Namibia,” he said.

Dangote explained that products shipped from Lagos could be distributed through Namibia to nearby markets, including Botswana and South Africa, with Zimbabwe and Zambia included in the Group’s wider expansion plans.

The proposed network is designed to connect refining capacity with strategic storage and transportation facilities, potentially improving supply efficiency in markets that have traditionally relied heavily on imported petroleum products.

Plans a 700,000 barrel refinery in Kenya

In addition to distribution infrastructure, Dangote revealed plans to set up another refinery in Lamu, Kenya, with a proposed capacity of around 700,000 barrels per day.

He said East Africa’s expanding economies, growing mining industry and growing energy demand made the region attractive for large-scale refining investment.

According to him, technical assessments have identified Lamu as the preferred location due to its access to deep water, marine infrastructure and availability of resources required for a major refinery.

Dangote said the proposed facility could source crude oil from multiple markets rather than relying solely on supplies from Kenya or Uganda.

He added that the investment decision was made within four months, claiming that commercial interests had attempted to delay the project through legal proceedings shortly before its public announcement.

The proposed refinery, if implemented at its stated capacity, would represent a major addition to the continent’s refining infrastructure and further extend the Group’s presence in East Africa.

However, the project development timeframe, financing arrangements and implementation details were not provided in the statement.

“Importing poverty into Africa”

Outlining the expansion strategy, Dangote called on African governments to adopt stronger industrial policies that protect domestic producers from unfair competition and encourage local production.

He argued that excessive dependence on imported goods undermines domestic industries, weakens job creation and limits the continent’s ability to retain economic value from its resources.

“Allowing imports to replace local production means we are exporting our jobs out of the continent and importing poverty into the continent,” he said.

The industrialist questioned why African countries should hesitate to protect their domestic industries when major global economies are increasingly taking steps to bolster local manufacturing.

“If America now says no, we will protect our industries, who are we in Africa not to protect our own industries?” he asked.

Dangote argued that industrialization would remain difficult to achieve without deliberate government policies that supported local producers, preserved production capacity and created sustainable employment.

His position emerges in the context of persistent debates in African economies about the balance between protecting emerging industries and maintaining competition, affordable prices and access to imported goods.

He argued that governments must create an environment in which African businesses can compete, expand production and develop capacity to meet growing domestic and regional demand.

Allocates 50 billion dollars for investments

Dangote also revealed that his Group has earmarked approximately $50 billion for investments between 2026 and 2030.

He said the investment program was part of a broader ambition to demonstrate that African businesses could deliver large-scale industrial projects that could transform the continent’s economic fortunes.

“The legacy we are trying to create is how do we industrialize our continent?” he said.

According to him, the proposed investments would extend the Group’s industrial footprint while encouraging other African entrepreneurs and investors to pursue ambitious projects in the manufacturing, energy and infrastructure sectors.

Dangote identified inadequate electricity supply, the weakness of financial systems and the underdevelopment of industrial policies as the main obstacles to Africa’s economic transformation.

He stressed that reliable electricity is indispensable for manufacturing, mining and mineral processing, particularly as African countries seek to move beyond the export of raw materials to produce higher-value goods.

The industrialist also highlighted the continent’s electricity access deficit, arguing that the shortage of reliable energy continues to limit business growth, productivity and job opportunities.

He argued that Africa possessed abundant natural resources, extensive agricultural land, and a large young population, but had yet to fully translate these advantages into widespread prosperity.

Dangote expressed optimism that sustained investment in energy infrastructure, industrial production and regional trade could help reverse the trend.

“The journey has begun,” he said. “But now we’re awake and we’re going to make it happen.”

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